File No. 837.77/87.

The American Minister to the Secretary of State.

No. 530.]

Sir: Referring to your telegraphic instructions of December 4, I have the honor to enclose herewith copy of a note which I have today addressed in pursuance of your instructions to His Excellency the President of the Republic of Cuba.

I have [etc.]

A.M. Beaupré.
[Page 389]

The American Minister to the President of Cuba.

No. 431.]

Your Excellency: In pursuance of telegraphic instructions from my Government I have the honor to inform Your Excellency that the Embassy of Great Britain in Washington has called the attention of the Department of State of the United States to the complaint made by the Cuban Central Railway Company in relation to the proposed Caibarién-Nuevitas railroad, and has requested that my Government make an investigation of the matter and take such action as the facts disclosed should warrant.

In the documents submitted by the British Embassy with the complaint it is alleged:

  • First. That executive decree accepting the North Coast Company’s proposal is illegal for the reason, among others, that it violates rights already possessed by the Cuban Central Company under early charters; that payment of the subvention contrary to existing law is provided by it; that the considerations under the terms of the law calling for bids upon which the award was based were not within the legal cognizance of the Executive; and that without proper formalities awards were made for lines other than the Caibarién-Nuevitas.
  • Second. That, financially and economically, the award to the North Coast Company was unwise and inexpedient, for the reasons, among others, that the subvention awarded the North Coast Railway Company was essentially higher than that asked by the Cuban Central Railway; that without any subvention whatsoever the Cuban Government [sic] will build the road if given a reasonable time; that by terms of the bid and award the road may be built with Government money by the North Coast Railway Company and then, by withdrawal from the public service, become a private road; that, whereas the Cuban Central Railway is a concern successful and of established standing, the North Coast Railway is a new concern never before having built and operated railways; and that technical reports made by the Inspector General of Railroads and by the Secretary of Public Works bear out the fact that the Cuban Central was the better project, these reports when making the award being ignored by the President.
  • Third. That according to the best information received by the Cuban Central, private information has been given by a high Cuban official to the promoters of the North Coast Railway that several millions of bonds which the North Coast Company proposes to float will be guaranteed by the Government of Cuba should such guaranty be necessary for selling the bonds.

While the question of the legality or illegality of executive action in awarding the contract does not appear to be one for my Government at this time, the foregoing points second and third, involving as they do the use of Government funds and the possible increase of the Cuban Government’s obligations, are, pursuant to the policy outlined in Mr. Gibson’s note1 addressed to Your Excellency on August 20, 1912, concerning the Zapata Swamp Concession, of immediate interest to my Government.

I am instructed to bring these allegations seriously to the attention of Your Excellency, and to point out that a proper disposition to avoid future trouble with reference to this matter would appear to require that Your Excellency give the question renewed and most serious consideration, in order that no action shall be taken which will either involve the Cuban Government in future difficulties or will constitute an improvident use of national funds and credit or an increase of national financial obligations. While earnestly pointing out the above considerations to Your Excellency, I desire to avoid giving the impression that my Government is espousing either project as against the other.

I avail [etc.]

A. M. Beaupré.